24 April 2014

Hairdressing salons have expressed deep concern about proposed changes to the funding of apprenticeships, warning plans to force small businesses to pay a proportion of training costs and bear the burden of administering training money are unworkable as they stand.

Government proposals to impose a compulsory contribution on salons that take on apprentices will simply stop the recruitment of apprentices in its tracks or mean salons having to cut the wages of permanent staff, members of the National Hairdressers’ Federation have warned.

Earlier this year the Department for Business, Innovation and Skills decided employers, rather than training providers, should take direct control of apprenticeship funding once new training structures launch next year, and in March launched a short consultation to gather views on how this might work.

This consultation closes on May 1 and, as part of its submission, the NHBF polled more than 400 members for their views.

This found almost unanimous opposition, with salons strongly urging the government to rethink its decision to hand over funding to employers. For small businesses the extra bureaucracy and red tape resulting from having to administer and manage this money would be onerous and time-consuming, NHBF members feared.

The idea of an employer cash contribution towards the cost of training and assessment was a particular bone of contention, and the lack of any detail as to what level this contribution is likely to be set at is a major worry.

As one salon owner put it: “It’s very difficult to make a considered judgement when the government hasn’t released figures on what the employer contribution would be.”

Another added: “If the compulsory cash contribution rate is set too high, small employers will decide they cannot afford to employ apprentices. I employ six apprentices and I wouldn’t be able to do this financially.”

Others expressed concerns as to what would happen – and who would foot the bill – if an apprentice left a salon upon completing their training, or mid-way through. The fact funding will be held back until an apprenticeship has been completed also raised fears about the possible impact this could have on cashflow, especially if the reimbursement system proves to be slow.

NHBF chief executive Hilary Hall said, “the government’s parallel reforms to create more employer-led apprenticeships, with hairdressers already acting as “trailblazer” employers, are positive.  Hairdressing is consistently in the top 10 most popular Apprenticeships each year – so it’s important to get the standards right, both for young people and employers.”

But, against the backdrop of tough competition on the high street, the minimum wage rising from this autumn and extra costs expected from pensions auto-enrolment, the proposed funding reforms risks undoing all the good work achieved so far.

“We run the risk of derailing a new, better apprenticeship system by imposing unwelcome and unnecessary changes to the funding models. The additional costs and extra administrative burden of these new proposals will reduce the number of salons prepared to take on apprentices – the exact opposite of what the government is looking to achieve,” she said.

Click for the full report of what NHBF members said about the Apprenticeship Funding Reform.

Click for a summary of the proposals  Apprenticeship Funding Reform summary.